Chapter 17 — State-Owned Enterprises and Designated Monopolies

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CHAPTER 17

STATE-OWNED ENTERPRISES AND DESIGNATED MONOPOLIES

Article 17.1: Definitions

For the purposes of this Chapter:

Arrangement means the Arrangement on Officially Supported Export Credits,

developed within the framework of the Organization for Economic Co-operation and

Development (OECD), or a successor undertaking, whether developed within or outside

of the OECD framework, that has been adopted by at least 12 original WTO Members

that were Participants to the Arrangement as of January 1, 1979;

commercial activities means activities which an enterprise undertakes with an

orientation toward profit-making1 and which result in the production of a good or

supply of a service that will be sold to a consumer in the relevant market in quantities

and at prices determined by the enterprise;2

commercial considerations means price, quality, availability, marketability,

transportation, and other terms and conditions of purchase or sale, or other factors that

would normally be taken into account in the commercial decisions of a privately owned

enterprise in the relevant business or industry;

designate means to establish, designate or authorise a monopoly, or to expand the scope

of a monopoly to cover an additional good or service;

designated monopoly means a privately owned monopoly that is designated after the

date of entry into force of this Agreement and any government monopoly that a Party

designates or has designated;

government monopoly means a monopoly that is owned, or controlled through

ownership interests, by a Party or by another government monopoly;

independent pension fund means an enterprise that is owned, or controlled through

ownership interests, by a Party that:

(a) is engaged exclusively in the following activities:

(i) administering or providing a plan for pension, retirement, social

security, disability, death or employee benefits, or any

1 For greater certainty, activities undertaken by an enterprise which operates on a not-for-profit basis or

on a cost-recovery basis are not activities undertaken with an orientation toward profit-making.

2 For greater certainty, measures of general application to the relevant market shall not be construed as

the determination by a Party of pricing, production, or supply decisions of an enterprise.

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combination thereof solely for the benefit of natural persons

who are contributors to such a plan and their beneficiaries; or

(ii) investing the assets of these plans;

(b) has a fiduciary duty to the natural persons referred to in subparagraph

(a)(i); and

(c) is free from investment direction from the government of the Party;3

market means the geographical and commercial market for a good or service;

monopoly means an entity, including a consortium or government agency, that in any

relevant market in the territory of a Party is designated as the sole provider or purchaser

of a good or service, but does not include an entity that has been granted an exclusive

intellectual property right solely by reason of the grant;

non-commercial assistance4 means assistance to a state-owned enterprise by virtue of

that state-owned enterprises government ownership or control, where:

(a) assistance means:

(i) direct transfers of funds or potential direct transfers of funds or

liabilities, such as:

(A) grants or debt forgiveness;

(B) loans, loan guarantees or other types of financing on terms

more favourable than those commercially available to that

enterprise; or

(C) equity capital inconsistent with the usual investment

practice, including for the provision of risk capital, of

private investors; or

3 Investment direction from the government of a Party: (a) does not include general guidance with respect

to risk management and asset allocation that is not inconsistent with usual investment practices; and (b) is

not demonstrated, alone, by the presence of government officials on the enterprises board of directors or

investment panel.

4 For greater certainty, non-commercial assistance does not include: (a) intra-group transactions within a

corporate group including state-owned enterprises, for example, between the parent and subsidiaries of

the group, or among the groups subsidiaries, when normal business practices require reporting the

financial position of the group excluding these intra-group transactions; (b) other transactions between

state-owned enterprises that are consistent with the usual practices of privately owned enterprises in arms

length transactions; or (c) a Party's transfer of funds, collected from contributors to a plan for pension,

retirement, social security, disability, death or employee benefits, or any combination thereof, to an

independent pension fund for investment on behalf of the contributors and their beneficiaries.

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(ii) goods or services other than general infrastructure on terms

more favourable than those commercially available to that

enterprise;

(b) by virtue of that state-owned enterprises government ownership or

control 5

means that the Party or any of the Partys state enterprises or

state-owned enterprises:

(i) explicitly limits access to the assistance to the Partys state-

owned enterprises;

(ii) provides assistance which is predominately used by the Partys

state-owned enterprises;

(iii) provides a disproportionately large amount of the assistance to

the Partys state-owned enterprises; or

(iv) otherwise favours the Partys state-owned enterprises through the

use of its discretion in the provision of assistance;

public service mandate means a government mandate pursuant to which a state-owned

enterprise makes available a service, directly or indirectly, to the general public in its

territory;6

sovereign wealth fund means an enterprise owned, or controlled through ownership

interests, by a Party that:

(a) serves solely as a special purpose investment fund or arrangement7 for

asset management, investment, and related activities, using financial

assets of a Party; and

(b) is a Member of the International Forum of Sovereign Wealth Funds or

endorses the Generally Accepted Principles and Practices (Santiago

Principles) issued by the International Working Group of Sovereign

Wealth Funds, October 2008, or such other principles and practices as

may be agreed to by the Parties,

5 In determining whether the assistance is provided by virtue of that state-owned enterprises

government ownership or control, account shall be taken of the extent of diversification of economic

activities within the territory of the Party, as well as of the length of time during which the non-

commercial assistance programme has been in operation.

6 For greater certainty, a service to the general public includes:

(a) the distribution of goods; and

(b) the supply of general infrastructure services.

7 For greater certainty, the Parties understand that the word arrangement as an alternative to fund

allows for a flexible interpretation of the legal arrangement through which the assets can be invested.

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and includes any special purpose vehicles established solely for such activities

described in subparagraph (a) wholly owned by the enterprise, or wholly owned by the

Party but managed by the enterprise; and

state-owned enterprise means an enterprise that is principally engaged in commercial

activities in which a Party:

(a) directly owns more than 50 per cent of the share capital;

(b) controls, through ownership interests, the exercise of more than 50 per

cent of the voting rights; or

(c) holds the power to appoint a majority of members of the board of

directors or any other equivalent management body.

Article 17.2: Scope8

1. This Chapter shall apply with respect to the activities of state-owned enterprises

and designated monopolies of a Party that affect trade or investment between Parties

within the free trade area.9

2. Nothing in this Chapter shall prevent a central bank or monetary authority of a

Party from performing regulatory or supervisory activities or conducting monetary and

related credit policy and exchange rate policy.

3. Nothing in this Chapter shall prevent a financial regulatory body of a Party,

including a non-governmental body, such as a securities or futures exchange or market,

clearing agency, or other organisation or association, from exercising regulatory or

supervisory authority over financial services suppliers.

4. Nothing in this Chapter shall prevent a Party, or one of its state enterprises or

state-owned enterprises from undertaking activities for the purpose of the resolution of a

failing or failed financial institution or any other failing or failed enterprise principally

engaged in the supply of financial services.

5. This Chapter shall not apply with respect to a sovereign wealth fund of a Party10

,

except:

8 For the purposes of this Chapter, the terms financial service supplier, financial institution and

financial services have the same meaning as in Article 11.1 (Definitions).

9 This Chapter also applies with respect to the activities of state-owned enterprises of a Party that cause

adverse effects in the market of a non-Party as provided in Article 17.7 (Adverse Effects).

10

Malaysia shall not be subject to dispute settlement under Chapter 28 (Dispute Settlement) with respect

to enterprises owned or controlled by Khazanah Nasional Berhad for a period of two years following the

entry into force of this Agreement for Malaysia, in light of ongoing development of state-owned

enterprise reform legislation.

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(a) Article 17.6.1 and Article 17.6.3 (Non-commercial Assistance) shall apply with respect to a Partys indirect provision of non-commercial

assistance through a sovereign wealth fund; and

(b) Article 17.6.2 (Non-commercial Assistance) shall apply with respect to a sovereign wealth funds provision of non-commercial assistance.

6. This Chapter shall not apply with respect to:

(a) an independent pension fund of a Party; or

(b) an enterprise owned or controlled by an independent pension fund of a

Party, except:

(i) Article 17.6.1 and Article 17.6.3 (Non-commercial Assistance) shall apply with respect to a Partys direct or indirect provision of

non-commercial assistance to an enterprise owned or controlled

by an independent pension fund; and

(ii) Article 17.6.1 and Article 17.6.3 (Non-commercial Assistance)

shall apply with respect to a Partys indirect provision of non-

commercial assistance through an enterprise owned or controlled

by an independent pension fund.

7. This Chapter shall not apply to government procurement.

8. Nothing in this Chapter shall prevent a state-owned enterprise of a Party from

providing goods or services exclusively to that Party for the purposes of carrying out

that Partys governmental functions.

9. Nothing in this Chapter shall be construed to prevent a Party from:

(a) establishing or maintaining a state enterprise or a state-owned enterprise;

or

(b) designating a monopoly.

10. Article 17.4 (Non-discriminatory Treatment and Commercial Considerations),

Article 17.6 (Non-commercial Assistance) and Article 17.10 (Transparency) shall not

apply to any service supplied in the exercise of governmental authority.11

11. Article 17.4.1(b), Article 17.4.1(c), Article 17.4.2(b) and Article 17.4.2(c) (Non-

discriminatory Treatment and Commercial Considerations) shall not apply to the extent

that a Partys state-owned enterprise or designated monopoly makes purchases and sales

of goods or services pursuant to:

11

For the purposes of this paragraph, a service supplied in the exercise of governmental authority has

the same meaning as in GATS, including the meaning in the Financial Services Annex where applicable.

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(a) any existing non-conforming measure that the Party maintains, continues,

renews or amends in accordance with Article 9.12.1 (Non-Conforming

Measures), Article 10.7.1 (Non-Conforming Measures) or Article 11.10.1

(Non-Conforming Measures), as set out in its Schedule to Annex I or in

Section A of its Schedule to Annex III; or

(b) any non-conforming measure that the Party adopts or maintains with

respect to sectors, subsectors, or activities in accordance with Article

9.12.2 (Non-Conforming Measures), Article 10.7.2 (Non-Conforming

Measures) or Article 11.10.2 (Non-Conforming Measures), as set out in

its Schedule to Annex II or in Section B of its Schedule to Annex III.

Article 17.3: Delegated Authority

Each Party shall ensure that when its state-owned enterprises, state enterprises

and designated monopolies exercise any regulatory, administrative or other

governmental authority that the Party has directed or delegated to such entities to carry

out, those entities act in a manner that is not inconsistent with that Partys obligations

under this Agreement.12

Article 17.4: Non-discriminatory Treatment and Commercial Considerations

1. Each Party shall ensure that each of its state-owned enterprises, when engaging

in commercial activities:

(a) acts in accordance with commercial considerations in its purchase or sale

of a good or service, except to fulfil any terms of its public service

mandate that are not inconsistent with subparagraph (c)(ii);

(b) in its purchase of a good or service:

(i) accords to a good or service supplied by an enterprise of another

Party treatment no less favourable than it accords to a like good or

a like service supplied by enterprises of the Party, of any other

Party or of any non-Party; and

(ii) accords to a good or service supplied by an enterprise that is a

covered investment in the Partys territory treatment no less

favourable than it accords to a like good or a like service supplied

by enterprises in the relevant market in the Partys territory that

are investments of investors of the Party, of any other Party or of

any non-Party; and

(c) in its sale of a good or service:

12

Examples of regulatory, administrative or other governmental authority include the power to

expropriate, grant licences, approve commercial transactions, or impose quotas, fees or other charges.

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(i) accords to an enterprise of another Party treatment no less

favourable than it accords to enterprises of the Party, of any other


(ii) accords to an enterprise that is a covered investment in the Partys

territory treatment no less favourable than it accords to enterprises

in the relevant market in the Partys territory that are investments

of investors of the Party, of any other Party or of any non-Party.13

2. Each Party shall ensure that each of its designated monopolies:

(a) acts in accordance with commercial considerations in its purchase or sale

of the monopoly good or service in the relevant market, except to fulfil

any terms of its designation that are not inconsistent with subparagraph

(b), (c) or (d);

(b) in its purchase of the monopoly good or service:

(i) accords to a good or service supplied by an enterprise of another

Party treatment no less favourable than it accords to a like good

or a like service supplied by enterprises of the Party, of any other


(ii) accords to a good or service supplied by an enterprise that is a

covered investment in the Partys territory treatment no less

favourable than it accords to a like good or a like service supplied

by enterprises in the relevant market in the Partys territory that

are investments of investors of the Party, of any other Party or of

any non-Party; and

(c) in its sale of the monopoly good or service:

(i) accords to an enterprise of another Party treatment no less

favourable than it accords to enterprises of the Party, of any other


(ii) accords to an enterprise that is a covered investment in the

Partys territory treatment no less favourable than it accords to

enterprises in the relevant market in the Partys territory that are

investments of investors of the Party, of any other Party or of any

non-Party; and

(d) does not use its monopoly position to engage in, either directly or

indirectly, including through its dealings with its parent, subsidiaries or

other entities the Party or the designated monopoly owns,

13

Article 17.4.1 (Non-discriminatory Treatment and Commercial Considerations) shall not apply with

respect to the purchase or sale of shares, stock or other forms of equity by a state-owned enterprise as a

means of its equity participation in another enterprise.

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anticompetitive practices in a non-monopolised market in its territory

that negatively affect trade or investment between the Parties.14

3. Paragraphs 1(b) and 1(c) and paragraphs 2(b) and 2(c) do not preclude a state-

owned enterprise or designated monopoly from:

(a) purchasing or selling goods or services on different terms or conditions

including those relating to price; or

(b) refusing to purchase or sell goods or services,

provided that such differential treatment or refusal is undertaken in accordance with

commercial considerations.

Article 17.5: Courts and Administrative Bodies

1. Each Party shall provide its courts with jurisdiction over civil claims against an

enterprise owned or controlled through ownership interests by a foreign government

based on a commercial activity carried on in its territory.15

This shall not be construed to

require a Party to provide jurisdiction over such claims if it does not provide jurisdiction

over similar claims against enterprises that are not owned or controlled through

ownership interests by a foreign government.

2. Each Party shall ensure that any administrative body that the Party establishes or

maintains that regulates a state-owned enterprise exercises its regulatory discretion in an

impartial manner with respect to enterprises that it regulates, including enterprises that

are not state-owned enterprises.16

14

For greater certainty, a Party may comply with the requirements of this subparagraph through the

enforcement or implementation of its generally applicable national competition laws and regulations, its

economic regulatory laws and regulations, or other appropriate measures.

15

This paragraph shall not be construed to preclude a Party from providing its courts with jurisdiction

over claims against enterprises owned or controlled through ownership interests by a foreign government

other than those claims referred to in this paragraph.

16

For greater certainty, the impartiality with which an administrative body exercises its regulatory

discretion is to be assessed by reference to a pattern or practice of that administrative body.

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Article 17.6: Non-commercial Assistance

1. No Party shall cause17

adverse effects to the interests of another Party through

the use of non-commercial assistance that it provides, either directly or indirectly18

, to

any of its state-owned enterprises with respect to:

(a) the production and sale of a good by the state-owned enterprise;

(b) the supply of a service by the state-owned enterprise from the territory of

the Party into the territory of another Party; or

(c) the supply of a service in the territory of another Party through an

enterprise that is a covered investment in the territory of that other Party

or any other Party.

2. Each Party shall ensure that its state enterprises and state-owned enterprises do

not cause adverse effects to the interests of another Party through the use of non-

commercial assistance that the state enterprise or state-owned enterprise provides to any

of its state-owned enterprises with respect to:

(a) the production and sale of a good by the state-owned enterprise;

(b) the supply of a service by the state-owned enterprise from the territory of

the Party into the territory of another Party; or

(c) the supply of a service in the territory of another Party through an

enterprise that is a covered investment in the territory of that other Party

or any other Party.

3. No Party shall cause injury to a domestic industry19

of another Party through the

use of non-commercial assistance that it provides, either directly or indirectly, to any of

its state-owned enterprises that is a covered investment in the territory of that other

Party in circumstances where:

(a) the non-commercial assistance is provided with respect to the production

and sale of a good by the state-owned enterprise in the territory of the

other Party; and

17

For the purposes of paragraphs 1 and 2, it must be demonstrated that the adverse effects claimed have

been caused by the non-commercial assistance. Thus, the non-commercial assistance must be examined

within the context of other possible causal factors to ensure an appropriate attribution of causality.

18

For greater certainty, indirect provision includes the situation in which a Party entrusts or directs an

enterprise that is not a state-owned enterprise to provide non-commercial assistance.

19

The term domestic industry refers to the domestic producers as a whole of the like good, or to those

domestic producers whose collective output of the like good constitutes a major proportion of the total

domestic production of the like good, excluding the state-owned enterprise that is a covered investment

that has received the non-commercial assistance referred to in this paragraph.

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(b) a like good is produced and sold in the territory of the other Party by the

domestic industry of that other Party.20

4. A service supplied by a state-owned enterprise of a Party within that Partys

territory shall be deemed not to cause adverse effects.21

Article 17.7: Adverse Effects

1. For the purposes of Article 17.6.1 and Article 17.6.2 (Non-commercial

Assistance), adverse effects arise if the effect of the non-commercial assistance is:

(a) that the production and sale of a good by a Partys state-owned enterprise

that has received the non-commercial assistance displaces or impedes

from the Partys market imports of a like good of another Party or sales

of a like good produced by an enterprise that is a covered investment in

the territory of the Party;

(b) that the production and sale of a good by a Partys state-owned enterprise

that has received the non-commercial assistance displaces or impedes

from:

(i) the market of another Party sales of a like good produced by an enterprise that is a covered investment in the territory of that other

Party, or imports of a like good of any other Party; or

(ii) the market of a non-Party imports of a like good of another Party;

(c) a significant price undercutting by a good produced by a Partys state-

owned enterprise that has received the non-commercial assistance and

sold by the enterprise in:

(i) the market of a Party as compared with the price in the same market of imports of a like good of another Party or a like good

that is produced by an enterprise that is a covered investment in

the territory of the Party, or significant price suppression, price

depression or lost sales in the same market; or

(ii) the market of a non-Party as compared with the price in the same market of imports of a like good of another Party, or significant

price suppression, price depression or lost sales in the same

market;

20

In situations of material retardation of the establishment of a domestic industry, it is understood that a

domestic industry may not yet produce and sell the like good. However, in these situations, there must be

evidence that a prospective domestic producer has made a substantial commitment to commence

production and sales of the like good.

21

For greater certainty, this paragraph shall not be construed to apply to a service that itself is a form of

non-commercial assistance.

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(d) that services supplied by a Party's state-owned enterprise that has

received the non-commercial assistance displace or impede from the

market of another Party a like service supplied by a service supplier of

that other Party or any other Party; or

(e) a significant price undercutting by a service supplied in the market of

another Party by a Partys state-owned enterprise that has received the

non-commercial assistance as compared with the price in the same

market of a like service supplied by a service supplier of that other Party

or any other Party, or significant price suppression, price depression or

lost sales in the same market.22

2. For the purposes of paragraphs 1(a), 1(b) and 1(d), the displacing or impeding of

a good or service includes any case in which it has been demonstrated that there has

been a significant change in relative shares of the market to the disadvantage of the like

good or like service. Significant change in relative shares of the market shall include

any of the following situations:

(a) there is a significant increase in the market share of the good or service

of the Partys state-owned enterprise;

(b) the market share of the good or service of the Partys state-owned

enterprise remains constant in circumstances in which, in the absence of

the non-commercial assistance, it would have declined significantly; or

(c) the market share of the good or service of the Partys state-owned

enterprise declines, but at a significantly slower rate than would have

been the case in the absence of the non-commercial assistance.

The change must manifest itself over an appropriately representative period sufficient to

demonstrate clear trends in the development of the market for the good or service

concerned, which, in normal circumstances, shall be at least one year.

3. For the purposes of paragraphs 1(c) and 1(e), price undercutting shall include

any case in which such price undercutting has been demonstrated through a comparison

of the prices of the good or service of the state-owned enterprise with the prices of the

like good or service.

4. Comparisons of the prices in paragraph 3 shall be made at the same level of

trade and at comparable times, and due account shall be taken for factors affecting price

comparability. If a direct comparison of transactions is not possible, the existence of

price undercutting may be demonstrated on some other reasonable basis, such as, in the

case of goods, a comparison of unit values.

5. Non-commercial assistance that a Party provides:

(a) before the signing of this Agreement; or

22

The purchase or sale of shares, stock or other forms of equity by a state-owned enterprise that has

received non-commercial assistance as a means of its equity participation in another enterprise shall not

be construed to give rise to adverse effects as provided for in Article 17.7.1 (Adverse Effects).

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(b) within three years after the signing of this Agreement, pursuant to a law

that is enacted, or contractual obligation undertaken, prior to the signing

of this Agreement,

shall be deemed not to cause adverse effects.

6. For the purposes of Article 17.6.1(b) and Article 17.6.2(b) (Non-commercial

Assistance), the initial capitalisation of a state-owned enterprise, or the acquisition by a

Party of a controlling interest in an enterprise, that is principally engaged in the supply

of services within the territory of the Party, shall be deemed not to cause adverse

effects.

Article 17.8: Injury

1. For the purposes of Article 17.6.3 (Non-commercial Assistance), the term

injury shall be taken to mean material injury to a domestic industry, threat of material

injury to a domestic industry or material retardation of the establishment of such an

industry. A determination of material injury shall be based on positive evidence and

involve an objective examination of the relevant factors, including the volume of

production by the covered investment that has received non-commercial assistance, the

effect of such production on prices for like goods produced and sold by the domestic

industry, and the effect of such production on the domestic industry producing like

goods.23

2. With regard to the volume of production by the covered investment that has

received non-commercial assistance, consideration shall be given as to whether there

has been a significant increase in the volume of production, either in absolute terms or

relative to production or consumption in the territory of the Party in which injury is

alleged to have occurred. With regard to the effect of the production by the covered

investment on prices, consideration shall be given as to whether there has been a

significant price undercutting by the goods produced and sold by the covered

investment as compared with the price of like goods produced and sold by the domestic

industry, or whether the effect of production by the covered investment is otherwise to

depress prices to a significant degree or to prevent price increases, which otherwise

would have occurred, to a significant degree. No one or several of these factors can

necessarily give decisive guidance.

3. The examination of the impact on the domestic industry of the goods produced

and sold by the covered investment that received the non-commercial assistance shall

include an evaluation of all relevant economic factors and indices having a bearing on

the state of the industry, such as actual and potential decline in output, sales, market

share, profits, productivity, return on investments, or utilisation of capacity; factors

affecting domestic prices; actual and potential negative effects on cash flow,

inventories, employment, wages, growth, ability to raise capital or investments and, in

the case of agriculture, whether there has been an increased burden on government

23

The periods for examination of the non-commercial assistance and injury shall be reasonably

established and shall end as closely as practical to the date of initiation of the proceeding before the panel.

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support programmes. This list is not exhaustive, nor can one or several of these factors

necessarily give decisive guidance.

4. It must be demonstrated that the goods produced and sold by the covered

investment are, through the effects24

of the non-commercial assistance, causing injury

within the meaning of this Article. The demonstration of a causal relationship between

the goods produced and sold by the covered investment and the injury to the domestic

industry shall be based on an examination of all relevant evidence. Any known factors

other than the goods produced by the covered investment which at the same time are

injuring the domestic industry shall be examined, and the injuries caused by these other

factors must not be attributed to the goods produced and sold by the covered investment

that has received non-commercial assistance. Factors which may be relevant in this

respect include, among other things, the volumes and prices of other like goods in the

market in question, contraction in demand or changes in the patterns of consumption,

and developments in technology and the export performance and productivity of the

domestic industry.

5. A determination of a threat of material injury shall be based on facts and not

merely on allegation, conjecture or remote possibility and shall be considered with

special care. The change in circumstances which would create a situation in which non-

commercial assistance to the covered investment would cause injury must be clearly

foreseen and imminent. In making a determination regarding the existence of a threat of

material injury, there should be consideration of relevant factors25

and of whether the

totality of the factors considered lead to the conclusion that further availability of goods

produced by the covered investment is imminent and that, unless protective action is

taken, material injury would occur.

24

As set out in paragraphs 2 and 3.

25

In making a determination regarding the existence of a threat of material injury, a panel pursuant to

Chapter 28 (Dispute Settlement) should consider, among other things, such factors as: (a) the nature of

the non-commercial assistance in question and the trade effects likely to arise therefrom; (b) a significant

rate of increase in sales in the domestic market by the covered investment, indicating a likelihood of

substantially increased sales; (c) sufficient freely disposable, or an imminent, substantial increase in,

capacity of the covered investment indicating the likelihood of substantially increased production of the

good by that covered investment, taking into account the availability of export markets to absorb

additional production; (d) whether prices of goods sold by the covered investment will have a significant

depressing or suppressing effect on the price of like goods; and (e) inventories of like goods.

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Article 17.9: Party-Specific Annexes

1. Article 17.4 (Non-discriminatory Treatment and Commercial Considerations) and Article 17.6 (Non-commercial Assistance) shall not apply with respect to the non-

conforming activities of state-owned enterprises or designated monopolies that a Party

lists in its Schedule to Annex IV in accordance with the terms of the Partys Schedule.

2. Article 17.4 (Non-discriminatory Treatment and Commercial Considerations), Article 17.5 (Courts and Administrative Bodies), Article 17.6 (Non-commercial

Assistance) and Article 17.10 (Transparency) shall not apply with respect to a Partys

state-owned enterprises or designated monopolies as set out in Annex 17-D

(Application to Sub-Central State-Owned Enterprises and Designated Monopolies).

3. (a) In the case of Singapore, Annex 17-E (Singapore) shall apply.

(b) In the case of Malaysia, Annex 17-F (Malaysia) shall apply.

Article 17.10: Transparency26, 27

1. Each Party shall provide to the other Parties or otherwise make publicly

available on an official website a list of its state-owned enterprises no later than six

months after the date of entry into force of this Agreement for that Party, and thereafter

shall update the list annually.28, 29

26

This Article shall not apply to Brunei Darussalam with respect to the Entities listed in the entry at

Annex IV Brunei Darussalam - 4 that engage in the non-conforming activities described in that entry.

27

This Article shall not apply to Viet Nam with respect to the Entities listed in:

(a) the entry at Annex IV Viet Nam 8 that engage in the non-conforming activities

described in that entry, until that entry ceases to have effect; and

(b) the entry at Annex IV Viet Nam 10 that engage in the non-conforming activities

described in that entry.

28

For Brunei Darussalam, this paragraph shall not apply until five years from the date of entry into force

of this Agreement for Brunei Darussalam. Separately, within three years after the date of entry into force

of this Agreement, Brunei Darussalam shall provide to the other Parties or otherwise make publicly

available on an official website a list of its state-owned enterprises that have an annual revenue derived

from their commercial activities of more than SDR 500 million in one of the three preceding years, and

shall thereafter update the list annually, until the obligation in this paragraph applies and replaces this

obligation.

29

For Viet Nam and Malaysia, this paragraph shall not apply until five years from the date of entry into

force of this Agreement for Viet Nam and Malaysia, respectively. Separately, within six months after the

date of entry into force of this Agreement for Viet Nam and Malaysia, respectively, each Party shall

provide to the other Parties or otherwise make publicly available on an official website a list of its state-

owned enterprises that have an annual revenue derived from their commercial activities of more than

SDR 500 million in one of the three preceding years, and shall thereafter update the list annually, until the

obligation in this paragraph applies and replaces this obligation.

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2. Each Party shall promptly notify the other Parties or otherwise make publicly

available on an official website the designation of a monopoly or expansion of the scope

of an existing monopoly and the terms of its designation.30

3. On the written request of another Party, a Party shall promptly provide the

following information concerning a state-owned enterprise or a government monopoly,

provided that the request includes an explanation of how the activities of the entity may

be affecting trade or investment between the Parties:

(a) the percentage of shares that the Party, its state-owned enterprises or

designated monopolies cumulatively own, and the percentage of votes

that they cumulatively hold, in the entity;

(b) a description of any special shares or special voting or other rights that

the Party, its state-owned enterprises or designated monopolies hold, to

the extent these rights are different than the rights attached to the general

common shares of the entity;

(c) the government titles of any government official serving as an officer or

member of the entitys board of directors;

(d) the entitys annual revenue and total assets over the most recent three

year period for which information is available;

(e) any exemptions and immunities from which the entity benefits under the

Partys law; and

(f) any additional information regarding the entity that is publicly available,

including annual financial reports and third-party audits, and that is

sought in the written request.

4. On the written request of another Party, a Party shall promptly provide, in writing, information regarding any policy or programme it has adopted or maintains that

provides for non-commercial assistance, provided that the request includes an

explanation of how the policy or programme affects or could affect trade or investment

between the Parties.

5. When a Party provides a response pursuant to paragraph 4, the information it

provides shall be sufficiently specific to enable the requesting Party to understand the

operation of and evaluate the policy or programme and its effects or potential effects on

trade or investment between the Parties. The Party responding to a request shall ensure

that the response it provides contains the following information:

(a) the form of the non-commercial assistance provided under the policy or

programme, for example, grant or loan;

30

Paragraphs 2, 3 and 4 shall not apply to Viet Nam with respect to the Entities listed in the entry at

Annex IV Viet Nam 9 that engage in the non-conforming activities described in that entry.

17-16

(b) the names of the government agencies, state-owned enterprises, or state

enterprises providing the non-commercial assistance and the names of

the state-owned enterprises that have received or are eligible to receive

the non-commercial assistance;

(c) the legal basis and policy objective of the policy or programme providing

for the non-commercial assistance;

(d) with respect to goods, the amount per unit of the non-commercial

assistance or, in cases where this is not possible, the total amount or the

annual amount budgeted for the non-commercial assistance, indicating, if

possible, the average amount per unit in the previous year;

(e) with respect to services, the total amount or the annual amount budgeted

for the non-commercial assistance, indicating, if possible, the total

amount in the previous year;

(f) with respect to policies or programmes providing for non-commercial

assistance in the form of loans or loan guarantees, the amount of the loan

or amount of the loan guaranteed, interest rates, and fees charged;

(g) with respect to policies or programmes providing for non-commercial

assistance in the form of the provision of goods or services, the prices

charged, if any;

(h) with respect to policies or programmes providing for non-commercial

assistance in the form of equity capital, the amount invested, the number

and a description of the shares received, and any assessments that were

conducted with respect to the underlying investment decision;

(i) duration of the policy or programme or any other time-limits attached to

it; and

(j) statistical data permitting an assessment of the effects of the non-

commercial assistance on trade or investment between the Parties.

6. If a Party considers that it has not adopted or does not maintain any policies or

programmes referred to in paragraph 4, it shall so inform the requesting Party in writing.

7. If any relevant points in paragraph 5 have not been addressed in the written

response, an explanation shall be provided in the written response itself.

8. The Parties recognise that the provision of information under paragraphs 5 and 7

does not prejudge the legal status of the assistance that was the subject of the request

under paragraph 4 or the effects of that assistance under this Agreement.

9. When a Party provides written information pursuant to a request under this

Article and informs the requesting Party that it considers the information to be

confidential, the requesting Party shall not disclose the information without the prior

consent of the Party providing the information.

17-17

Article 17.11: Technical Cooperation

The Parties shall, where appropriate and subject to available resources, engage in

mutually agreed technical cooperation activities, including:

(a) exchanging information regarding Parties experiences in improving the

corporate governance and operation of their state-owned enterprises;

(b) sharing best practices on policy approaches to ensure a level playing

field between state-owned and privately owned enterprises, including

policies related to competitive neutrality; and

(c) organising international seminars, workshops or any other appropriate

forum for sharing technical information and expertise related to the

governance and operations of state-owned enterprises.

Article 17.12: Committee on State-Owned Enterprises and Designated

Monopolies31

1. The Parties hereby establish a Committee on State-Owned Enterprises and

Designated Monopolies (Committee), composed of government representatives of each

Party.

2. The Committees functions shall include:

(a) reviewing and considering the operation and implementation of this

Chapter;

(b) at a Partys request, consulting on any matter arising under this Chapter;

(c) developing cooperative efforts, as appropriate, to promote the principles

underlying the disciplines contained in this Chapter in the free trade area

and to contribute to the development of similar disciplines in other

regional and multilateral institutions in which two or more Parties

participate; and

(d) undertaking other activities as the Committee may decide.

31

Article 17.12 (Committee on State-Owned Enterprises and Designated Monopolies) shall not apply to

Viet Nam with respect to the Entities listed in:

(a) the entry at Annex IV Viet Nam 8 that engage in the non-conforming activities

described in that entry, until that entry ceases to have effect; and

(b) the entry at Annex IV Viet Nam 10 that engage in the non-conforming activities

described in that entry.

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3. The Committee shall meet within one year after the date of entry into force of

this Agreement, and at least annually thereafter, unless the Parties agree otherwise.

Article 17.13: Exceptions

1. Nothing in Article 17.4 (Non-discriminatory Treatment and Commercial

Considerations) or Article 17.6 (Non-commercial Assistance) shall be construed to:

(a) prevent the adoption or enforcement by any Party of measures to respond

temporarily to a national or global economic emergency; or

(b) apply to a state-owned enterprise with respect to which a Party has

adopted or enforced measures on a temporary basis in response to a

national or global economic emergency, for the duration of that

emergency.

2. Article 17.4.1 (Non-discriminatory Treatment and Commercial Considerations)

shall not apply with respect to the supply of financial services by a state-owned

enterprise pursuant to a government mandate if that supply of financial services:

(a) supports exports or imports, provided that these services are:

(i) not intended to displace commercial financing; or

(ii) offered on terms no more favourable than those that could be obtained for comparable financial services in the commercial

market;32

(b) supports private investment outside the territory of the Party, provided

that these services are:

(i) not intended to displace commercial financing, or


market; or

(c) is offered on terms consistent with the Arrangement, provided that it falls

within the scope of the Arrangement.

3. The supply of financial services by a state-owned enterprise pursuant to a

government mandate shall be deemed not to give rise to adverse effects under Article

32

In circumstances where no comparable financial services are offered in the commercial market: (a) for

the purposes of paragraphs 2(a)(ii), 2(b)(ii), 3(a)(ii) and 3(b)(ii), the state-owned enterprise may rely as

necessary on available evidence to establish a benchmark of the terms on which such services would be

offered in the commercial market; and (b) for the purposes of paragraphs 2(a)(i), 2(b)(i), 3(a)(i) and

3(b)(i), the supply of the financial services shall be deemed not to be intended to displace commercial

financing.

17-19

17.6.1(b) (Non-commercial Assistance) or Article 17.6.2(b), or under Article 17.6.1(c)

or Article 17.6.2(c) where the Party in which the financial service is supplied requires a

local presence in order to supply those services, if that supply of financial services:33

(a) supports exports and imports, provided that these services are:



market;

(b) supports private investment outside the territory of the Party, provided that these services are:



market; or

(c) is offered on terms consistent with the Arrangement, provided that it falls

within the scope of the Arrangement.

4. Article 17.6 (Non-commercial Assistance) shall not apply with respect to an

enterprise located outside the territory of a Party over which a state-owned enterprise of

that Party has assumed temporary ownership as a consequence of foreclosure or a

similar action in connection with defaulted debt, or payment of an insurance claim by

the state-owned enterprise, associated with the supply of the financial services referred

to in paragraphs 2 and 3, provided that any support the Party, a state enterprise or state-

owned enterprise of the Party, provides to the enterprise during the period of temporary

ownership is provided in order to recoup the state-owned enterprises investment in

accordance with a restructuring or liquidation plan that will result in the ultimate

divestiture from the enterprise.

5. Article 17.4 (Non-discriminatory Treatment and Commercial Considerations),

Article 17.6 (Non-commercial Assistance), Article 17.10 (Transparency) and Article

17.12 (Committee on State-Owned Enterprises and Designated Monopolies) shall not

apply with respect to a state-owned enterprise or designated monopoly if in any one of

the three previous consecutive fiscal years, the annual revenue derived from the

commercial activities of the state-owned enterprise or designated monopoly was less

than a threshold amount which shall be calculated in accordance with Annex 17-A.34,

35

33

For the purposes of this paragraph, in cases where the country in which the financial service is

supplied requires a local presence in order to supply those services, the supply of the financial services

identified in this paragraph through an enterprise that is a covered investment shall be deemed to not give

rise to adverse effects.

34

When a Party invokes this exception during consultations under Article 28.5 (Consultations), the consulting Parties should exchange and discuss available evidence concerning the annual revenue of the

state-owned enterprise or the designated monopoly derived from the commercial activities during the

17-20

Article 17.14: Further Negotiations

Within five years of the date of entry into force of this Agreement, the Parties

shall conduct further negotiations on extending the application of the disciplines in this

Chapter in accordance with Annex 17-C (Further Negotiations).

Article 17.15: Process for Developing Information

Annex 17-B (Process for Developing Information Concerning State-Owned

Enterprises and Designated Monopolies) shall apply in any dispute under Chapter 28

(Dispute Settlement) regarding a Partys conformity with Article 17.4 (Non-

discriminatory Treatment and Commercial Considerations) or Article 17.6 (Non-

commercial Assistance).

three previous consecutive fiscal years in an effort to resolve during the consultations period any

disagreement regarding the application of this exception.

35

Notwithstanding this paragraph, for a period of five years after the date of entry into force of this

Agreement for Brunei Darussalam, Malaysia or Viet Nam, Article 17.4 (Non-discriminatory Treatment

and Commercial Considerations) and Article 17.6 (Non-commercial Assistance) shall not apply with

respect to a state-owned enterprise or designated monopoly of Brunei Darussalam, Malaysia or Viet Nam,

respectively, if in any one of the three previous consecutive fiscal years, the annual revenue derived from

the commercial activities of the enterprise was less than SDR 500 million.

17-21

ANNEX 17-A

THRESHOLD CALCULATION

1. On the date of entry into force of this Agreement, the threshold referred to in

Article 17.13.5 (Exceptions) shall be 200 million Special Drawing Rights (SDRs).

2. The amount of the threshold shall be adjusted at three-year intervals with each

adjustment taking effect on 1 January. The first adjustment shall take place on the first

1 January following the entry into force of this Agreement, in accordance with the

formula set out in this Annex.

3. The threshold shall be adjusted for changes in general price levels using a

composite SDR inflation rate, calculated as a weighted sum of cumulative per cent

changes in the Gross Domestic Product (GDP) deflators of SDR component currencies

over the three-year period ending 30 June of the year prior to the adjustment taking

effect, and using the following formula:

1 = (1 + ( w .

))0

where:

0 = threshold value at base period; 1 = new (adjusted) threshold value; w

= respective (fixed) weights of each currency, , in the SDR (as at 30 June of the year prior to adjustment taking effect); and

= cumulative per cent change in the GDP deflator of each

currency, , in the SDR over the three-year period ending 30 June of the year prior to adjustment taking effect.

4. Each Party shall convert the threshold into national currency terms where the

conversion rates shall be the average of monthly values of that Partys national currency

in SDR terms over the three-year period to 30 June of the year before the threshold is to

take effect. Each Party shall notify the other Parties of their applicable threshold in their

respective national currencies.

5. For the purposes of this Chapter, all data shall be drawn from the International

Monetary Funds International Financial Statistics database.

6. The Parties shall consult if a major change in a national currency vis--vis the

SDR were to create a significant problem with regard to the application of this Chapter.

17-22

ANNEX 17-B

PROCESS FOR DEVELOPING INFORMATION CONCERNING STATE-

OWNED ENTERPRISES AND DESIGNATED MONOPOLIES

1. If a panel has been established pursuant to Chapter 28 (Dispute Settlement) to

examine a complaint arising under Article 17.4 (Non-discriminatory Treatment and

Commercial Considerations) or Article 17.6 (Non-commercial Assistance), the

disputing Parties may exchange written questions and responses, as set forth in

paragraphs 2, 3 and 4, to obtain information relevant to the complaint that is not

otherwise readily available.

2. A disputing Party (questioning Party) may provide written questions to another

disputing Party (answering Party) within 15 days of the date the panel is established.

The answering Party shall provide its responses to the questions to the questioning Party

within 30 days of the date it receives the questions.

3. The questioning Party may provide any follow-up written questions to the

answering Party within 15 days of the date it receives the responses to the initial

questions. The answering Party shall provide its responses to the follow-up questions to

the questioning Party within 30 days of the date it receives the follow-up questions.

4. If the questioning Party considers that the answering Party has failed to

cooperate in the information-gathering process under this Annex, the questioning Party

shall inform the panel and the answering Party in writing within 30 days of the date the

responses to the questioning Partys final questions are due, and provide the basis for its

view. The panel shall afford the answering Party an opportunity to reply in writing.

5. A disputing Party that provides written questions or responses to another

disputing Party pursuant to these procedures shall, on the same day, provide the

questions or answers to the panel. In the event that a panel has not yet been composed,

each disputing Party shall, upon the composition of the panel, promptly provide the

panel with any questions or responses it has provided to the other disputing Party.

6. The answering Party may designate information in its responses as confidential

information in accordance with the procedures set out in the Rules of Procedure

established under Article 27.2.1(f) (Functions of the Commission) or other rules of

procedure agreed to by the disputing Parties.

7. The time periods in paragraphs 2, 3 and 4 may be modified upon agreement of

the disputing Parties or approval by the panel.

8. In determining whether a disputing Party has failed to cooperate in the

information-gathering process, the panel shall take into account the reasonableness of

the questions and the efforts the answering Party has made to respond to the questions

in a cooperative and timely manner.

17-23

9. In making findings of fact and its initial report, the panel should draw adverse

inferences from instances of non-cooperation by a disputing Party in the information-

gathering process.

10. The panel may deviate from the time period set out in Chapter 28 (Dispute

Settlement) for the issuance of the initial report if necessary to accommodate the

information-gathering process.

11. The panel may seek additional information from a disputing Party that was not

provided to the panel through the information-gathering process where the panel

considers the information necessary to resolve the dispute. However, the panel shall not

request additional information to complete the record where the information would

support a Partys position and the absence of that information in the record is the result

of that Partys non-cooperation in the information-gathering process.

17-24

ANNEX 17-C

FURTHER NEGOTIATIONS

Within five years of the date of entry into force of this Agreement, the Parties

shall conduct further negotiations on extending the application of:

(a) the disciplines in this Chapter to the activities of state-owned enterprises that are owned or controlled by a sub-central level of government, and

designated monopolies designated by a sub-central level of government,

where such activities have been listed in Annex 17-D (Application to

Sub-Central State-Owned Enterprises and Designated Monopolies); and

(b) the disciplines in Article 17.6 (Non-commercial Assistance) and Article 17.7 (Adverse Effects) to address effects caused, in a market of a non-

Party, by the supply of services by a state-owned enterprise.

17-25

ANNEX 17-D

APPLICATION TO SUB-CENTRAL

STATE-OWNED ENTERPRISES AND DESIGNATED MONOPOLIES

Pursuant to Article 17.9.2 (Party-Specific Annexes), the following obligations

shall not apply with respect to a state-owned enterprise owned or controlled by a sub-

central level of government and a designated monopoly designated by a sub-central

level of government:36

(a) For Australia:

(i) Article 17.4.1(a) and (b) (Non-discriminatory Treatment and Commercial Considerations);

(ii) Article 17.4.2 (Non-discriminatory Treatment and Commercial Considerations);

(iii) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance), with respect to the

production and sale of a good in competition with a like good

produced and sold by a covered investment in the territory of

Australia;

(iv) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance); and

(v) Article 17.10.1 (Transparency).

(b) For Canada:


(ii) Article 17.4.1(c)(i) (Non-discriminatory Treatment and Commercial Considerations);

(iii) Article 17.4.2 (Non-discriminatory Treatment and Commercial Considerations);

(iv) Article 17.5.2 (Courts and Administrative Bodies), with respect to administrative regulatory bodies established or maintained by a

sub-central level of government;

36

For the purposes of this Annex, sub-central level of government means the regional level of

government and the local level of government of a Party.

17-26

(v) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance), with respect to the


produced and sold by a covered investment;

(vi) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance);

(vii) Article 17.6.3 (Non-commercial Assistance);

(viii) Article 17.10.1 (Transparency); and

(ix) Article 17.10.4 (Transparency), with respect to a policy or program adopted or maintained by a sub-central level of

government.

(c) For Chile:




(iv) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance), with respect to the



Chile;

(v) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance); and

(vi) Article 17.10.1 (Transparency).

(d) For Japan:

(i) Article 17.4.1 (Non-discriminatory Treatment and Commercial Considerations);


(iii) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance) with respect to the

production and sale of a good:

17-27

(A) by a state-owned enterprise in competition with a like

good produced and sold by a covered investment of

another Party in the territory of Japan; or

(B) by a state-owned enterprise that is a covered investment in

competition with like good produced and sold by a

covered investment of another Party in the territory of any

other Party;

(iv) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance);

(v) Article 17.6.3 (Non-commercial Assistance); and


(e) For Malaysia:

(i) Article 17.4 (Non-discriminatory Treatment and Commercial Considerations);

(ii) Article 17.5.2 (Courts and Administrative Bodies), with respect to administrative regulatory bodies established or maintained by a


(iii) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance), with respect to the



Malaysia;

(iv) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance); and

(v) Article 17.10 (Transparency).

(f) For Mexico:






17-28


Mexico;


(vi) Article 17.10 (Transparency).

(g) For New Zealand:

(i) Article 17.4.1 (Non-discriminatory Treatment and Commercial Considerations);


(iii) Article 17.6.1 (a) (Non-commercial Assistance) and Article 17.6.2 (a) (Non-commercial Assistance), with respect to the



New Zealand;

(iv) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance);

(v) Article 17.6.3 (Non-commercial Assistance); and


(h) For Peru:







Peru;



17-29

(i) For the United States:

(i) Article 17.4.1 (a) (Non-discriminatory Treatment and Commercial Considerations);

(ii) Article 17.4.1 (b) (Non-discriminatory Treatment and Commercial Considerations), with respect to purchases of a good

or service;

(iii) Article 17.4.1(c)(i) (Non-discriminatory Treatment and Commercial Considerations);

(iv) Article 17.4.2 (Non-discriminatory Treatment and Commercial Considerations), with respect to designated monopolies

designated by a sub-central level of government;

(v) Article 17.5.2 (Courts and Administrative Bodies), with respect to administrative regulatory bodies established or maintained by a


(vi) Article 17.6.1(a) (Non-commercial Assistance) and Article 17.6.2(a) (Non-commercial Assistance), with respect to the


produced and sold by a covered investment in the territory of the

United States;

(vii) Article 17.6.1(b) and (c) (Non-commercial Assistance), and Article 17.6.2(b) and (c) (Non-commercial Assistance); and

(viii) Article 17.10.1 (Transparency).

(j) For Viet Nam:

(i) Article 17.4 (Non-discriminatory Treatment and Commercial

Considerations);

(ii) Article 17.5.2 (Courts and Administrative Bodies), with respect

to administrative regulatory bodies established or maintained by a


(iii) Article 17.6.1(a) (Non-commercial Assistance) and Article

17.6.2(a) (Non-commercial Assistance), with respect to the


produced and sold by a covered investment in the territory of Viet

Nam;

(iv) Article 17.6.1(b) and (c) (Non-commercial Assistance), and

Article 17.6.2(b) and (c) (Non-commercial Assistance); and

17-30

(v) Article 17.10 (Transparency).

17-31

ANNEX 17-E

SINGAPORE

1. Neither Singapore, nor a sovereign wealth fund of Singapore37, shall take action to direct or influence decisions of a state-owned enterprise owned or controlled by a

sovereign wealth fund of Singapore, including through the exercise of any rights or

ownership interests over such state-owned enterprises, except in a manner consistent

with this Chapter. However, Singapore, or a sovereign wealth fund of Singapore, may

exercise its voting rights in any state-owned enterprise it owns or controls through

ownership interests in a manner that is not inconsistent with this Chapter.

2. Article 17.4.1 (Non-discriminatory Treatment and Commercial Considerations) shall not apply with respect to a state-owned enterprise owned or controlled by a

sovereign wealth fund of Singapore.

3. Article 17.6.2 (Non-commercial Assistance) shall not apply with respect to a state-owned enterprise owned or controlled by a sovereign wealth fund of Singapore,

unless:

(a) in the five-year period preceding the purported breach of Article 17.6.2

(Non-commercial Assistance), Singapore or a sovereign wealth fund of

Singapore has:

(i) appointed38

the CEO or a majority of the other senior

management of the state-owned enterprise;

(ii) appointed a majority of the members of the board of directors of

that state-owned enterprise;39

or

(iii) taken action to exercise its legal rights in that state-owned

enterprise to actively direct and control the business decisions of

that state-owned enterprise in a manner that would be inconsistent

with the obligations in this Chapter; or

(b) the state-owned enterprise, pursuant to law, government policy or other

measures, is required to:

37

For the purposes of this Chapter, sovereign wealth funds of Singapore include GIC Private Limited

and Temasek Holdings (Private) Limited. Temasek Holdings (Private) Limited is the legal owner of its

assets.

38

For paragraphs 3(a)(i) and 3(a)(ii), such appointment includes an appointment that occurred before the

aforementioned five-year period, provided the tenure falls during that period.

39

For greater certainty, the mere exercise of a shareholder vote to approve the election of directors does

not constitute the appointment of such directors.

17-32

(i) provide non-commercial assistance to another state-owned

enterprise; or

(ii) make decisions about its commercial purchase or sales.

4. Singapore is deemed to comply with Article 17.10.1 (Transparency) with respect to any state-owned enterprise owned or controlled by a sovereign wealth fund of

Singapore if:

(a) Singapore provides to the other Parties or otherwise makes publicly

available on an official website the annual report of the sovereign wealth

fund which owns that state-owned enterprise;

(b) any class of securities of that state-owned enterprise is listed on a

securities exchange regulated by a member of an internationally

recognised securities commissions body including the International

Organisation of Securities Commissions; or

(c) that state-owned enterprise files its annual financial reports based on

internationally-recognised financial reporting standards including the

International Financial Reporting Standards.

17-33

ANNEX 17-F

MALAYSIA

Permodalan Nasional Berhad

1. The obligations in this Chapter shall not apply with respect to Permodalan

Nasional Berhad or an enterprise owned or controlled by Permodalan Nasional Berhad,

provided that Permodalan Nasional Berhad:

(a) engages exclusively in the following activities:

(i) administering or providing a plan for members of the public relating to collective investment schemes for the purpose of

enhancing their savings and investments, in furtherance of a

national agenda solely for the benefit of natural persons who are

participants to such a plan and their beneficiaries; or


(b) has a fiduciary duty to the natural persons referenced in subparagraph (a); and

(c) is free from investment direction from the Government of Malaysia.40

2. Notwithstanding paragraph 1 of this Annex, Article 17.6.1 (Non-commercial

Assistance) and Article 17.6.3 shall apply with respect to Malaysias:

(a) direct or indirect provision of non-commercial assistance to an enterprise owned or controlled by Permodalan Nasional Berhad;

41 and

(b) indirect provision of non-commercial assistance through an enterprise owned or controlled by Permodalan Nasional Berhad.

40

Investment direction from the Government of Malaysia: (a) does not include general guidance of the

Malaysian Government with respect to risk management and asset allocation that is not inconsistent with

usual investment practices; and (b) is not demonstrated, alone, by the presence of Malaysian government

officials on the enterprises board of directors or investment panel.

41

For greater certainty, for the purposes of this Annex, non-commercial assistance does not include

Malaysias transfer of funds collected from contributors to Permodalan Nasional Berhad for investment

on behalf of the contributors and their beneficiaries.

17-34

Lembaga Tabung Haji

3. The obligations in this Chapter shall not apply with respect to Lembaga Tabung

Haji or an enterprise owned or controlled by Lembaga Tabung Haji, provided that

Lembaga Tabung Haji:

(a) engages exclusively in the following activities:

(i) administering or providing a personal savings and investment plan solely for the benefit of the natural persons who are

contributors to such a plan and their beneficiaries, for the purpose

of:

(A) enabling individual Muslim beneficiaries, through the

investment of their savings in investment activities

permissible in Islam, to support their expenditure during

pilgrimage; and

(B) protecting, safeguarding the interests and ensuring the

welfare of pilgrims during pilgrimage by providing

various facilities and services; or


(b) has a fiduciary duty to the natural persons referenced in subparagraph (a); and

(c) is free from investment direction from the Government of Malaysia.42

4. Notwithstanding paragraph 3 of this Annex, Article 17.6.1 (Non-commercial

Assistance) and Article 17.6.3 (Non-commercial Assistance), shall apply with respect to

Malaysias:

(a) direct or indirect provision of non-commercial assistance to an enterprise owned or controlled by Lembaga Tabung Haji

43; and

(b) indirect provision of non-commercial assistance through an enterprise owned or controlled by Lembaga Tabung Haji.

42

Investment direction from the Government of Malaysia: (a) does not include general guidance of the

Malaysian Government with respect to risk management and asset allocation that is not inconsistent with

usual investment practices; and (b) is not demonstrated, alone, by the presence of Malaysian government

officials on the enterprises board of directors or investment panel.

43

For greater certainty, for the purposes of this Annex, non-commercial assistance does not include

Malaysias transfer of funds collected from contributors to Lembaga Tabung Haji for investment on

behalf of the contributors and their beneficiaries.

Documents

Chapter 17 — State-Owned Enterprises and Designated Monopolies